Newsletter

Oil taxes would be bad for young engineers

Too often, the discussion about how best to move Alaska forward under the weight of a serious fiscal crisis tends to solely focus on the immediate, near-term needs of the state. That is a disservice to those of us who are studying and working hard to ensure that Alaska is poised for decades of success. This discussion should be about not only navigating the next two years but also the next two generations. In our case, we would prefer to be productive, contributing members of the state’s workforce for many years to come. Indeed, it is that dream to be dutifully employed and participating in Alaska’s economy that brought us to the University of Alaska Fairbanks, specifically the engineering program.

That same dream is what compels us to voice our thoughts on the debate going on in Juneau. In our mind, implementing punitive taxes on the industry that serves as the backbone of our state’s economy is short-sighted and at odds with prudent longterm endeavors. We understand that state leaders are looking under every rock for more revenue, which is natural given the size and scope of the fiscal gap. What we fail to understand, or agree with, is implementing a policy that may generate some immediate cash, but will ultimately drain the state of revenue, jobs, and opportunity in the long-term.

In our view, House Bill 111, the current oil tax bill, will jeopardize the opportunities we young Alaskans are preparing for in school. It is not a question of whether Alaska has sufficient natural resources, like oil and gas, to sustain our economy for decades into the future. Just this year, Alaskans have heard about incredible new discoveries that could provide a major boost to the state’s oil production. Companies like Caelus, ConocoPhillips, and Repsol are sitting on huge finds that could re-energize our oil and gas industry for decades. As engineers in training, we want the opportunity to be a part of bringing those projects from concept to reality.

Energy is necessary for all economic sectors and limiting or hurting the energy supply has numerous secondary and tertiary effects on the economy and the quality of life for Alaskans in general. House Bill 111 takes us backward by trading long-term employment and revenue opportunities for short-term cash. Again, we understand the need for state leaders to close the budget gap, but what sense does it make to demand millions more from of an industry that is still cash flow negative, while simultaneously hurting the state’s chances of generating billions in revenues in taxes and royalties in the future? Perhaps it is because college students are, by necessity, forward-looking, but we see more value in a healthy, sustainable economy in the long-term than the government getting a bit more cash for a year or two, a move that is all but assured to cause oil and gas companies to pull back from some or all Alaska investments.

We express these sentiments cautiously, and with some degree of reluctance, given their unavoidable political entanglements. However, as students looking at the prospect of trying to find meaningful employment in Alaska in the coming years, we hope our views will carry some weight to those receptive to our plight. We are a diverse group of individuals from all over the world who bring different viewpoints and experiences with us. What unites us is a passion for engineering and a deeply vested interest in Alaska’s future. Squeezing the industry that serves as our state’s bread and butter will not improve our prospects, or those of any Alaskans, for family-sustaining jobs.

Please, to our elected officials and policymakers, as you struggle with the pressing issue of how to solve the state’s cash flow problem, take no actions that might provide a short-term boost, but will lead to fewer opportunities for the next generation of Alaskans. Regardless, we appreciate the hard work of our public servants who are working around the clock to plug the budget hole, and trust that policy will outweigh politics when deciding which choices will benefit Alaskans most in the long run.